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MBS and the hidden wait

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  • MBS and the hidden wait

    I will share this with you in the hope you will understand that even in Australia the wait to recover your money is a very protracted and painful process.

    Background: My Investment was sound first mortgage debentures with an old and trusted operator totaling a little over AUD $500,000.
    In 2008 the company read the tealeaves and decided to exit the business via voluntary liquidation.

    The initial "sweat" letter of 27th February 2008

    Now those in the USA will understand that in Australia we did not suffer much in the GFC but the credit squeeze happened here just as it has happen there.

    The full story so far can be found in this Link if you want to read the whole unwinding thing:

    and the latest is here.

    You can see that at best I will receive AUD $0.70 back for ever dollar I invested. This is a good outcome and I should be clear by mid 2011 to pronounce a tax loss of around $150K against other income.

    My question to you is how bad and how long is it going to take the USA to unwind its mess bearing in mind a greater fall and greater value. My take is it will cripple the entire building and construction industry for at least a decade and will have the knock on effect of strangling investors, as it has me, until it is unwound. You talk about kicking the can down the road but you can see from this example of positive action that until it is all brought to Market and sold at Market no healing can occur. It takes a very long time before you can see your way clear to go forward. I pray that the black swans stay away.
    In all it is my first experience at a loss from a secure (guaranteed :rolleyes: )investment and it is not much in a Larger balanced portfolio - but it hurts.
    P.S You will also notice that even in well run companies like this, the Directors have put their hand in the cookie jar and are the slowest to repay what they took, see section 6